Now that many of the sanctions on Iran have been lifted, many firms are keen to explore the opportunities available there - but the picture is complicated. Before getting involved in the country, it`s crucial to make sure you`ve taken measures to help protect your business from unwanted surprises.
Firstly, the Iranian government wants foreign investment and products such as iron, steel, chemicals, machinery and transport vehicles. Secondly, Iran boasts the second largest market in the Middle East after Egypt and the second largest economy after Saudi Arabia. With a population of over 80 million, it is strategically located and has a highly educated workforce, so offers a great place to do business â€“ if you go about it in the right way.
While there are some great opportunities in Iran, there are associated risks. For one thing, there are still sanctions and other legal prohibitions on business, which it could be easy to violate without local knowledge. In addition, there are trade regulations, export controls and potential for political exposure. Meanwhile, because of the political turbulence in the recent past and evidence of money -laundering, bribery and fraud, it could be easy to be tainted by association. Iran came top of the list in the 2017 Basel AML Index - an annual ranking assessing country risk regarding money laundering (#AML) and terrorism financing (#CFT) which gives an overview of 146 countries, followed closely by Afghanistan and Guinea-Bissau. Therefore firms looking to do business in Iran need to be aware of the potential for reputational as well as political risk. This is a particular concern for businesses with strong US connections, as US primary sanctions on Iran remain in place. The sanctions remaining in force also prevent Iran-related transactions from passing through the US financial system. This complicates payments into and out of the country. You should also be aware that you will need a bank that is willing to facilitate payments. There are also any number of practical and legal considerations you`ll need to take into account. And, of course, what business would be complete without good old red tape? Iran is a highly centralised country and the government regulates nearly all activities. Even basic requests can require complex forms, administrative processes and stamps of approval and these can lead to delays.
The Iranian government has proposed ambitious plans for transport, power and water over the next 10 years but these will require more than $1 trillion of investment to come to fruition. However, there are already eight international airports and at least 10 seaports serving the country, with a promise of billions of dollars` worth of investment to come.
Having taken the above on board, if you`re still keen to go ahead, here are the essentials:
- Get a â€˜commercial card, which is granted once you`ve registered with the Ministry of Industry, Mines and Trades or the Iran Chamber of Commerce, Industries, Mines and Agriculture
- Register on Iran`s commercial register
- Get all official company documentation translated into Farsi by an official translator
- Contact Cedar Rose
Frankly, there is still very limited due diligence information available publicly on Iranian companies and individuals, but Cedar Rose
could assist you with a Company Credit Report
on your customer, a Directorship and Shareholding
search of our database to ascertain which other entities the owners are associated with and finally Global Compliance Checks
and Political Associations and Connections (PEP) Screening
to ensure you are not dealing with - or potentially linked to - companies or individuals that are sanctioned or may have red flags around them. To find out how we can help you trade safely, visit our website at www.cedar-rose.com
and see for yourself the range of business intelligence services that we have made available for the entire #MENA region.